Chips Break Sales Record in 2013

While memory-fueled growth in overall sales during the first half of 2013, the SIA's Toohey said the industry "saw strength across the board in a number of segments."

Logic was the largest semiconductor category, increasing 5.2% year-over-year to $85.9 billion in 2013. Memory netted $67 billion, a 17.6% increase, with MOS micro-ICs at $58.7 billion rounding out the top three segments in terms of sales revenue.

"Logic is used in many end products and was not affected as much by depressed PC sales like micro-ICs," Yinug said. "The other end markets are growing pretty consistently. In 2014, I would expect that logic would lead in terms of sub-product segments; probable memory would be second."

Analysts at Deutsche Bank reported that December DRAM revenue was up 5% month-over-month to $3.36 billion, while aggregate flash revenue increased 9% to $2.45 billion. The bank reported NAND memory as down 5.8% year-over-year, though SIA said NAND flash "experienced strong growth of 8.1 percent."

"We see that trend increasing in 2014 and beyond, we continue to see memory as a very healthy sector. There’s clearly no shortage of need for enhanced memory in mobile and servers," Yinug said. "There are only about five major memory players and in 2014 there will be a little more rationality in terms of what industry is doing, competition within sector, and price."

Other positively performing product segments include optoelectronic products, which increased 5.3% annually to $27.6 billion in sales, and analog, which reached $40.1 billion in sales. Deutsche Bank said aggregate MPU revenue was up 15% month-over-month in December to $3.99 billion, but below typical seasonality of 26% growth.

Fourth quarter overall sales reached $79.9 billion, a 7.7% increase over the previous year, the SIA said. While the United States remains the leader in headquartered semiconductor companies, Toohey and Yinug cited China and the Asia Pacific market as the largest for end users, and growing.

"The industry finished the year on a strong note with its best December on record, indicating that recent momentum is likely to carry over into 2014," Toohey said.

DB couldn't give additional details on why they forecast 8% growth, which is double that of the WSTS. WSTS/SIA (which use the same numbers) couldn't comment beyond "improved macro picture" - which makes me curious why there is such a difference in estimates. Is ~4% or 8% growth in 2014 more likely?

I am thinking that there is good growth in the market but not in the areas where it has come before. Contrast this to the ugly things that have come out of Intel and other traditional leaders recently and you see a real transition away from dependence on PC growth and towards cell phones / tablets / smart thermostats and smoke alarms. That type of shift tends to introduce more uncertainty into predictions.

I think 4% revenue growth is more reasonable and still optimistic. The market is changing with increased competition and more focus on mobile, embedded, and new IoT applications that are often smaller and less expensive. Units should still continue to grow, but we are likely on a plateau for revenue.